Why Boards Should Get the C-suite's Input on Board Composition

Seventy-five percent of C-suite executives believe two or more directors should be replaced, according to a survey conducted by PwC and The Conference Board of more than 600 C-suite executives. However, there are variations within the C-suite: while only 20 percent of CEOs believe two or more directors should be replaced, 69 percent of chief financial officers, 76 percent of chief legal officers, and 82 percent of chief human resources officers think so.

Insights for What’s Ahead

While boards are in control of their own composition, they should enlist the C-suite’s input—beyond that of the CEO—in board evaluations and director recruitment. Even if boards do not directly involve other C-suite executives in annual board and committee evaluations, the CEO should seek the views of the C-suite as part of his or her own participation in the process.

CEOs may have a much more positive—and accurate—view of their directors for several reasons: CEOs spend more time with directors and are privy to their conversations and contributions that other C-suite executives are not aware of; they have a first-hand understanding of the role that boards are expected to play; and they likely had a greater role in recruiting directors than their subordinates. Some of the broader C-suite’s dissatisfaction may stem from ignorance or factors that have nothing to do with director performance. Having said that, CFOs and CLOs spend a substantial amount of time with the board and have a good idea of the board’s responsibilities; their desire for greater turnover is a call to action. CEOs should also address the C-suite’s dissatisfaction with board composition; even if it’s unfounded, it can have a negative impact throughout the organization.

The Conference Board has launched its Corporate Director Council program, offering an entirely new level of experience for directors in leadership positions on US public company boards. By joining a Corporate Director Council, Members will gain practical insights that can enhance their board’s effectiveness as a strategic partner with management. To learn more about this program, please contact Zachery Katich

Additionally, Members of our ESG Center are entitled to a complimentary expert briefing tailored specifically for your board, C-suite, or any group of employees on a broad range of ESG topics, including board effectiveness. If you are interested in taking advantage of this exclusive benefit, please get in touch with Jonathan Yankelewitz